Thailand ignoring WTO cigarette deal, PHL alleges

Posted on November 27, 2015

THE GOVERNMENT said Thailand is not complying with rulings issued by the World Trade Organization (WTO) by continuing to impose rules that unfairly place imported cigarettes at a disadvantage.

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In a statement submitted to the WTO’s dispute settlement body on Nov. 25, the Philippines said it is “deeply concerned” about two issues that undermine the recommendations and rulings relating to Thailand custom’s treatment of imported cigarettes, and the resulting agreement between the two countries.

“First, the Philippines remains deeply concerned with the Thai Attorney General’s decision to prosecute the importer of Philippine cigarettes for alleged under-declaration of customs value,” the statement reads.

“Second, the Philippines is also deeply concerned about a separate Thai BoA [Customs Board of Appeals] ruling rejecting transaction value for 20 entries from Indonesia that were covered by the rulings and recommendations in the original proceedings in this dispute,” it said.

The complaint stemmed from concerns first raised by the country in February 2008 that highlighted a number of Thai fiscal and customs measures affecting cigarettes from the Philippines.

The measures include Thailand’s customs valuation practices, excise tax, health tax, TV tax, VAT regime, retail licensing requirements and import guarantees imposed upon cigarette importers. The Philippines claims that Thailand administers these measures in violation of provisions under the 1994 General Agreement on Tariffs and Trade (GATT).

The Philippines made separate claims about various Thai customs valuation measures affecting cigarette imports. It also claimed that Thailand’s ad valorem excise tax, health tax and TV tax, on both imported and domestic cigarettes, are inconsistent with a GATT provision that requires the publication of trade laws and regulations of general application.

The country also pointed to an inconsistency in Thailand’s value-added tax regime, a dual license requirement that orders tobacco and cigarette retailers to hold separate licenses to sell domestic and imported cigarettes. It said the licensing requirement results in a less favorable treatment for imported products.

The WTO created a panel to study the dispute, which in November 2010 sided with many of the issues raised by the Philippines. Thailand appealed the panel’s report but an appellate body in June 2011 upheld most of the previous findings.

In August 2011, Thailand said it intended to implement the recommendations and rulings of the dispute settlement body, and that it would need a reasonable period of time to do so. About a month later, the Philippines and Thailand informed the body that they had mutually agreed on the period of compliance.

In January 2013, Thailand said it had completed the final outstanding steps in its implementation process, which the Philippines disputed. Thailand said in June 2014 that it did not have to take any further action to implement the dispute settlement body’s rulings.

In its latest statement, the Philippines said it “remains open to bilateral discussions with Thailand to resolve the outstanding compliance issue.” -- Victor V. Saulon